ICELAND
obas
Iceland’s IT sector is also rapidly developing,
.com/R
having ridden a downturn that saw several
kphoto
mergers and acquisitions. Stronger companies
iStoc have emerged better equipped to expand and
serve foreign markets.
alumInIum
The remote eastern fjords of Iceland may not seem
the obvious location for a huge aluminium smelter.
But Alcoa’s presence there is about partnership
...due to millenia of
and a commitment by Iceland’s government to
volcanic activity, which
supply it with hydroelectric power.
also causes the geysers
The result: a huge facility at Reydarfjordur
and hot pools found all
costing around $1.1bn, capable of producing
over the island.
almost 350,0000 tonnes a year. It began running
have international players interested in Iceland cent on hydroelectric and geothermal power, in 2007 and is now at full capacity. Alcoa, which
– engineering companies have been involved Iceland has a cool climate. Assuming a design claims to be the world’s leading aluminium
for years and this co-operation continues.’ They uses external air, this means that cooling data producer, says it has created 450 new jobs
include Japanese experts in turbines, Germans centres is almost free. There are also abundant directly and as many indirectly.
who specialise in condensers, and others who supplies of cold water, which would do away Alongside the nearby Kárahnjúkar
will play a role in building up the industry, he with any need for cooling towers. hydropower facility developed by Landsvirkjun,
says. Verne Global is the ice-breaker, and Iceland’s national power company, the combined
Stefansson believes the School for Hilmarsson says another is in the pipeline. facilities represent the largest construction
Renewable Energy Science is an important ‘People want proof of concept from Verne projects and private/public sector investments
development. ‘After the economic turmoil Global – there’s no major international data – almost $3bn – in Icelandic history.
there’ll be a demand for educated people in centre in Iceland. We got PwC to do a big study But it didn’t happen without a battle. At
the industry. Despite unemployment around of Iceland comparing it with India and the UK. first it was vetoed by Iceland’s national planning
Europe there are advertisements for people with We came out very well in terms of energy costs agency because of the environmental impact.
skills in Asia and South America. The demand is and facilities costs.’ But Landsvirkjun appealed and, eventually, the
rising... governments are putting on pressure for This won’t be labour-intensive, but then scheme was passed in parliament by 41 votes
renewable energy.’ that’s the sort of industry Iceland needs: to nine.
according to Hilmarsson, 20 to 50 is the ideal Iceland’s eagerness to attract power-
Data centres, It anD telecoms size company. IT data centres fit the country’s intensive companies can be simply explained:
Data centres are big business worldwide. There are economic priorities: Iceland’s infrastructure the country generates a lot of energy – but
some 10,000 in the US and about 7,000 in Europe. without a transmission cable linking it to the
Soon Iceland will have its first – exactly the sort of
Exploitation of waterfalls
outside world, has no means of exporting its
investment the country is looking for.
and geothermal sources has
electricity.
Verne Global, a joint venture by General
been restricted to Icelandic
‘We found the power price in Iceland very
Catalyst and Novator, has signed an agreement competitive,’ says Erna Indriðadóttir, head of PR
with the national energy company Landsvirkjun, companies, as has power for Alcoa. ‘But it’s been a controversial issue.’
Farice – the submarine communications system
production and distribution
Apart from price, Alcoa says the appeal of
linking Iceland, the Faroe Islands and Scotland – Iceland is that the energy is renewable. ‘It’s in
and Keflavik Airport Development Corporation for telecoms networks and services is highly line with our policy on climate change – we
(KADECO). advanced and it’s receptive to all companies have reduced CO emissions by 33 per cent
2
The plan is to establish a data centre by wanting licence-based agreements. since 1990,’ said Ms Indriðadóttir. ‘If you can
Keflavik International Airport. The company Interest transcends the economic crisis. ‘This build an aluminium smelter with a hydropower
is putting up more than $300m and in return is an industry that doesn’t seem to be failing plant, emissions are eight times lower than with
will be provided with electricity, data transfer, a because the amount of information is still a coal-fired plant.
building and a site, due to start operation early growing,’ says Hilmarsson. While no new major ‘Politicians wanted us to build here because
next year. It could create about 100 jobs. commitments had been made as Pathfinder the population was decreasing – fishing and
Growing concerns about global warming, Business was going to press, negotiations are at farming were declining and people were moving
energy shortages and dearer electricity make an advanced stage with some parties. away. It had been going on for 30 years. When
Iceland’s green energy attractive – data centre Telecoms costs are among the lowest in the we advertised we had 3,000-4,000 applicants
managers are scrambling to find increasingly region, according to OECD. The sector has seen for around 450 jobs.’
scarce power while dealing with the excess heat enormous development and investment, partly The smelter was built by construction
their facilities generate. Besides running 100 per as a result of deregulation and competition. company Bechtel, employing Australian and
pAthfINDEr busINEss l JUNE/JULY 2009 17
PBS12 pp12-19 Iceland.indd 17 8/6/09 12:50:21
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